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RES-8517 Authorizing the Issuance of Multifamily Housing Revenue BondsRESOLUTION NO, 8517 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ORANGE AUTHORIZING THE ISSUANCE OF MULTIFAMll..Y HOUSING REVENUE BONDS (VILLA SANTIAGO REHABILITATION PROJECT _ FEDERAL NATIONAL MORTGAGE ASSOCIATION NEW CONSTRUCTION FORWARD COMMITMENT PROGRAM), SERIES 1995 IN AN AMOUNT NOT TO EXCEED $13,500,000 FOR THE PURPOSE OF FINANCING THE ACQUlSmON AND REHABILITATION OF THE VILLA SANTIAGO PROJECT AND DETERMINING OTHER MATTERS IN CONNECTION THEREWITH WHEREAS, the City of Orange (the "Issuer") is a general law city and municipal corporation organized and existing under the Constitution and laws of the State of California; and WHEREAS, the Issuer is authorized by and pursuant to Chapter 7 of Part 5 of Division 31 of the California Health and Safety Code, as amended and supplemented (the "Act"), to issue revenue bonds for the purpose of frnancing the construction or development of multifamily rental housing and for the provision of capital improvements in connection with and determined necessary to such multifamily rental housing; and WHEREAS, F.C. Orange Associates L.P. (the "Borrower"), a California limited partnership expects to acquire approximately 18.52 acres ofland (the "Land") located generally at 11841 Prospect Avenue in the City of Orange; and WHEREAS, the Borrower expects to acquire and rehabilitate the 260-unit apartment community known as "Villa Santiago" located on the Land, consisting of 77 two- story buildings 15 duplexes, 18 triplexes and 44 fourplexes) with all townhouse units (the Land and the apartment community located thereon being herein referred to collectively as the " Project"); and WHEREAS, the Borrower has requested that (a) Washington Capital DUS, Inc., a Delaware corporation (the "Lender"), provide permanent financing for the Project by making a mortgage loan (the "Mortgage Loan") to the Borrower, to be secured by the Project, and ( b) the Issuer finance the Mortgage Loan by issuing Multifamily Housing Revenue Bonds ( Villa Santiago Rehabilitation Project - Federal National Mortgage Association ("Fannie Mae") New Construction Forward Commitment Program), Series 1995 in an amount not to exceed 13,500,000 (the "Bonds") and making the proceeds available to the Lender to enable the Lender to fund the Mortgage Loan; and RESO. NO. 8517 1 - WHEREAS, in order to provide the funds necessary to enable the Lender to finance the Mortgage Loan, the Issuer expects, pursuant to the Act, to authorize the issuance of the Bonds pursuant to a Trust Indenture, dated as of September I, 1995 (the "Indenture"), by and between the Issuer and an institution meeting the requirements of the Indenture, as Trustee (the "Trustee"), in a principal amount not to exceed $13,500,000; and WHEREAS, the Mortgage Loan will be evidenced by a mortgage note (the "Mortgage Note"), secured by a deed of trust (the "Mortgage") and otherwise evidenced and secured by the other Mortgage Loan Documents referred to in the Indenture; and WHEREAS, Fannie Mae has issued its commitment (the "Fannie Mae Commitment"), dated July 31, 1995, to the Lender, pursuant to which Fannie Mae will, upon satisfaction of the terms and conditions of the Fannie Mae Commitment, purchase the Mortgage Loan by issuance of a Fannie Mae Certificate evidencing an interest in a mortgage pool comprised solely of the Mortgage Loan and under the terms of which payment of principal and interest on the Fannie Mae Certificate is guaranteed by Fannie Mae regardless of whether corresponding payments on the Mortgage Loan are paid when due; and WHEREAS, the Fannie Mae Certificate will be issued by Fannie Mae following acquisition of and in exchange for the Mortgage Loan, provided that Fannie Mae shall not be obligated to acquire the Mortgage Loan or to issue the Fannie Mae Certificate except upon compliance by the Lender with each of the terms and conditions set forth in the Fannie Mae Commitment; and WHEREAS, upon Fannie Mae's acquisition of the Mortgage Loan in exchange for the Fannie Mae Certificate, the Fannie Mae Certificate will be held in trust by the Trustee to secure payment of the Bonds; and WHEREAS, the Bonds will be secured (a) prior to the Fannie Mae Certificate Delivery Date, by proceeds of the Bonds and certain funds of the Borrower invested in Permitted Investments, and by Investment Income on the Permitted Investments and (b) after the Fannie Mae Certificate Delivery Date, by the Fannie Mae Certificate, by distributions under the Fannie Mae Certificate, by funds invested in Permitted Investments, and by Investment Income on the Permitted Investments, as each of such terms is defined in the Indenture; and WHEREAS, the development and rental of the Project will be regulated by, among other documents, the terms of (a) a Financing Agreement, dated as of September 1, 1995 (the Financing Agreement"), among the Issuer, the Trustee, the Borrower and the Lender, and (b) a Tax and Regulatory Agreement, dated as of September 1, 1995 (the "Regulatory Agreement"), among the Issuer, the Trustee and the Borrower; and RESO. NO. 8517 2- WHEREAS, the Bonds are proposed to be issued and sold to Westhoff, Cone & Holmstedt (the "Underwriter") pursuant to the terms of a Purchase Contract (the "Purchase Contract"), among the Issuer, the Borrower and the Underwriter; and WHEREAS, the Issuer has caused to be prepared and lodged with the City Clerk, the following instruments: 1) the form of Indenture; 2) the form of Financing Agreement; 3) the form of Regulatory Agreement; 4) the form of Preliminary Official Statement to be used in connection with the offer and sale of the Bonds; and 5) the form of Purchase Contract; and WHEREAS, pursuant to the requirements of Section 147(t) of the Internal Revenue Code of 1986, as amended (the "Code"), the Issuer is required to obtain the approval of its City Councilor Mayor prior to issuing the Bonds, which approval is to be preceded by a duly noticed public hearing; and WHEREAS, the Issuer has given notice of the required public hearing pursuant to the Code, and the issuance of the Bonds is contingent upon the approval by the City Council or the Mayor; and WHEREAS, the Issuer is now duly authorized and empowered, pursuant to each and every requirement oflaw, to issue the Bonds for the purpose and in the manner herein provided; and WHEREAS, the Issuer now wishes to provide for the issuance of the Bonds; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ORANGE DOES HEREBY RESOLVE AS FOLLOWS: Section 1. Findings. The City Council hereby specifically finds and declares that the actions authorized hereby constitute, and are in furtherance of, the public purposes and municipal affairs of the Issuer including, without limitation, the provision of affordable housing, and that the statements, findings and determinations of the City Council set forth in the preambles of the documents approved herein are true and correct. The City Council hereby further specifically finds and declares that this Resolution is being adopted pursuant to the powers granted by Part 5 of Division 31 of the Health and Safety Code of the State of California, as amended. RESO. NO. 8517 3- Section 2. Authorization ofIssuance of Bonds: Limited Obligations ofIssuer. In order to provide the funds necessary to enable the Lender to finance the Mortgage Loan and to pay the costs of issuance associated therewith, the City Council hereby authorizes and approves the issuance of Multifamily Housing Revenue Bonds (Villa Santiago Rehabilitation Project - Fannie Mae New Construction Forward Commitment Program), Series 1995 in an amount not to exceed 13, 500,000, maturing and bearing interest at the rates provided and subject to all of the terms provided in the Indenture hereinafter approved; provided, however. that the interest rate on the Bonds shall not exceed 7.00%.The Bonds shall be limited obligations of the Issuer, payable solely out of the revenues,receipts and other moneys pledged therefor under the Indenture. No holder of any Bonds has the right to compel any exercise of the taxing power of the Issuer to pay the Bonds, the interest or redemption premium, if any, thereon, and the Bonds shall not constitute an indebtedness of the Issuer, the State of California (the "State") or any political subdivision thereof, or a loan of the credit thereof within the meaning of any constitutional or statutory provision, nor shall the Bonds be construed to create any moral obligation on the part of the Issuer, the State or any agency or subdivision thereof with respect to the payment of such Bonds. Neither the members of the City Council of the Issuer, nor any official or employee of the Issuer, nor any person executing the Bonds shall be liable personally on the Bonds or be subject to any personal liability or accountability by reason of the issuance thereof. The Bonds shall not be a debt of the United States of America, Fannie Mae or any other governmental agency, and are not guaranteed by the full faith and credit of the United States of America, Fannie Mae or any other governmental agency. Section 3. Approval of Indenture. The City Council hereby approves the form of Indenture, substantially in the form lodged with the City Clerk, and the Mayor, the City Manager or the Finance Director, or any of their designees, is authorized and requested to execute and deliver the Indenture, but with such changes therein, deletions therefrom and modifications thereto as the person executing the Indenture shall approve, such approval to be conclusively evidenced by the execution and delivery thereof.Section 4. ADDroval of RegulatOlY AlUeement. The City Council hereby approves the form of Regulatory Agreement, substantially in the form lodged with the City Clerk, and the Mayor, the City Manager or the Finance Director, or any of their designees, is authorized and requested to execute and deliver the Regulatory Agreement, but with such changes therein,deletions therefrom and modifications thereto as the person executing the Regulatory Agreement shall approve, such approval to be conclusively evidenced by the execution and delivery thereof.RESO. NO. 8517 4- Section 5. Aooroval of Financinl!: Agreement. The City Council hereby approves the form of Financing Agreement, substantially in the form lodged with the City Clerk, and the Mayor, the City Manager or the Finance Director, or any of their designees, is authorized and requested to execute and deliver the Financing Agreement, but with such changes therein, deletions therefrom and modifications thereto as the person executing the Financing Agreement shall approve, such approval to be conclusively evidenced by the execution and delivery thereof. Section 6. Aoproval of Preliminary Official Statement and Official Statement. The City Council hereby approves the form of the Preliminary Official Statement substantially in the form lodged with the City Clerk. The Mayor, the City Manager or the Finance Director, or any of their designees, is authorized and requested (i) to make such changes in the Preliminary Official Statement, including deletions therefrom and modifications thereto, as the Mayor, the City Manager or the Finance Director, or any oftheir designees, shall approve in connection with the preparation of the Preliminary Official Statement and the preparation of a final Official Statement, to be dated on or about the date of sale of the Bonds (the "Official Statement"), and (ii) to execute and deliver the Official Statement on or following the date of sale of the Bonds, the execution of the Official Statement by any of said persons to be conclusive evidence of the approval thereof. The Mayor, the City Manager or the Finance Director, or any of their designees, is hereby authorized and directed to execute a certificate deeming the Preliminary Official Statement final for purposes of Rule I5c2-12 of the Securities Exchange Commission.The Mayor, the City Manager or the Finance Director, or any of their designees, shall cause copies of the Official Statement to be delivered to the Underwriter no later than seven business days following the sale of the Bonds to the Underwriter. The City Council hereby consents to and approves the distribution and circulation of the Preliminary Official Statement and the Official Statement by the Underwriter in connection with the offering, marketing and sale of the Bonds.Section 7. Approval of Purchase Contract: Award of Bonds. The City Council hereby approves the form of Purchase Contract, substantially in the form lodged with the City Clerk, and the Mayor, the City Manager or the Finance Director, or any of their designees, is authorized and requested to execute and deliver the Purchase Contract, but with such changes therein, deletions therefrom and modifications thereto as the person executing the Purchase Contract shall approve,such approval to be conclusively evidenced by the execution and delivery thereof. The Mayor,the City Manager or the Finance Director, or any of their designees, is hereby authorized to award the Bonds on the terms as provided in the Purchase Contract and in this Resolution.Sectiol1 ~. Further Action Authorized. The Mayor, the City Manager, the Finance Director, the City Clerk, the City Attorney and the other officers of the Issuer are hereby authorized anddire<.ted, jointly and severally, to do any and all things which they may deem necessary or advisable in order to consummate the offer and sale of the Bonds and otherwise to carry out, give effect to wd comply with the terms and intent of this Resolution, including the appointment from time to time of a Remarketing Agent in accordance with the provisions of the Indenture. Such actions heretofore taken by such officers are hereby ratified, confirmed and approved.RESO. NO. 8517 5 - ADOPTED this 12th day of September, 1995. ArrEST: STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss CITY OF ORANGE ) I, Cassandra 1. Cathcart, City Clerk of the City of Orange, do hereby certifY that the foregoing Resolution No. 8517 was introduced and adopted at the regular meeting of the City Council of the City of Orange held on the 12th day of September, 1995, by the following vote of the members thereof: AYES:COUNCIL MEMBERS MURPHY, BARRERA, MAYOR COONTZ, SPURGEON, SLATER NOES: COUNCIL MEMBERS NONE ABSENT: COUNCIL MEMBERS NONE ABSTAIN: COUNCIL MEMBERS NONE IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of Orange this 12th day of September, 1995. QJb~L'k~C~.r~-r CITY CLERK OF CITY OF ORANGE reIOBSI71vs:blmel:1 RESO. NO. 8517 6-